London, March 22, 2026, 17:15 GMT
London shares start the week on the back foot. The FTSE 100 slid to 9,918.33 Friday, off 1.4%, with the FTSE 250 losing 1.0% to finish at 21,341.97—marking three weeks of declines in a row. Brent crude wrapped up at $112.19 a barrel, highest since July 2022. Analysts expect oil prices to keep climbing as trading resumes Monday.
UK stocks are feeling the squeeze now as both inflation and interest rates bite. The Bank of England left rates at 3.75% on Thursday, warning that inflation might hit 3.5% in the next two quarters. Governor Andrew Bailey warned against jumping to conclusions about more rate hikes. On the other hand, Rob Wood at Pantheon Macroeconomics flagged that energy futures are getting close to levels that could justify another increase, but Aberdeen’s Luke Bartholomew thinks the bar for tightening remains high, even though any rate cut could be a distant prospect. Broker calls are shifting quickly: J.P. Morgan sees quarter-point hikes from the BoE in April and July, while Citigroup says actions will stay “path dependent.” Reuters
The bond market isn’t blinking. On Friday, yields for 10-year gilts jumped past 5%—a level not seen since the financial crisis. February’s public borrowing hit 14.3 billion pounds, blowing past the Reuters poll estimate of 8.5 billion. “Pressure on the government to shield households from higher energy bills will be great,” said Elliott Jordan-Doak at Pantheon. Reuters
Market pain isn’t hitting every corner the same way. Reuters flagged aerospace and defence names, along with banks, as the session’s main laggards. Smiths Group shares were slammed, skidding 9.8% after the company posted half-year organic revenue below forecasts. JD Wetherspoon tumbled even harder—down 10.6%—as the pub chain cautioned that its annual profit may fall short; higher energy bills and wage-linked taxes had already carved into its first-half earnings.
Still, oil’s propping up the FTSE 100 to a degree. BP wrapped up Friday at 5.62 pounds, Shell at 3,434 pence—these two giants are anchoring the blue-chip index, especially if crude prices keep climbing.
That’s far from a textbook hedge. Tony Sycamore at IG described the U.S. ultimatum to Iran as dropping a “48-hour ticking time bomb of elevated uncertainty over markets” right as the week kicked off. Amrita Sen, who runs Energy Aspects, flagged that some investors might be overly confident Iran would back down—meaning the threat of another oil spike still loomed heading into Monday. Reuters
The data comes in fast this week. Flash PMI numbers arrive Tuesday, offering an early look at private-sector activity. Then it’s UK inflation figures on Wednesday—consumer and producer prices both drop at 7:00 a.m., per the Office for National Statistics. Retail sales follow at the same hour on Friday. S&P Global Market Intelligence says March PMI will be the first real test of how the war is hitting costs, supply, and demand. January CPI printed at 3.0%.
The outlook could still ease. On Saturday, G7 ministers pledged action to keep global energy supplies moving and safeguard chokepoints like the Strait of Hormuz. Reuters added that Prime Minister Keir Starmer plans an emergency meeting next week with top ministers and Bailey to tackle cost-of-living concerns. For London stocks, it all comes down to whether crude settles quickly enough to prevent fallout from commodities spilling over into household budgets and profits.
